Is a contract of employment a waste of time?

Have you provided your employees with a contract of employment? It may seem unnecessary for smaller businesses or charities to do so but as the attached article from breatheHR describes, it is vital to have a written contract in case of dispute down the line.

Does a contract of employment have to be written?

Not immediately – a verbal contract of employment is binding and is effective from the first day of employment. The benefit of having it written down is it removes all ambiguity. Once an employee has worked for you for over a month though, a written contract of employment needs to be provided with 2 months of the employee starting work for you.

From 6th April 2020, it is also a requirement that the contract of employment is issued no later than the first day of employment. Although you don’t need to reissue contracts to existing employees, you will need to provide an updated one within a month of a request being made.

It’s also worth noting that although there are new requirements, the whole detail does not need to be contained in the contract. It can refer to separate documents so that the contract doesn’t become too unwieldy.

Related documents

In many cases, organisations choose to split some of the detail between several related documents. For instance details of the role may be contained on an attached job description with just the job title referenced in the contract of employment. An offer letter may contain details of benefits unique to the role whereas the contract of employment contains the generic ones (life assurance etc.) How you choose to detail it is totally up to you but as it is a valuable opportunity for you to create a good impression with your new employee, it is worth investing time to create a document or documents that look professional and give a window into how working for your company will be.

Where you have an employee handbook, or separate policies, it is advisable to not make them part of the contract of employment. This way you are not required to consult when you want to make changes.

Custom and practice

If you consistently do things such as issue bonuses or pay sick pay at a more generous rate than is detailed in your written contract of employment, then this may be classed as custom and practice. What does this mean? Well essentially it becomes an ‘implied’ term of employment. So although it isn’t written down, your employees could reasonably expect it to be continued each year. For this reason, you should always be careful before introducing generous practices. We are not saying don’t do it, but it would be wise to get advice on the potential unexpected impact that could result before you introduce it.

What if I haven't got time?

Here at Cornerstone Resources, we can help you review and update your current contracts or even put together your first one for you. We can also help you with the policies that need to accompany them. Just click the contact us button below or call Nicci on 07908 875146 or Rob on 07494 161169 and we will be happy to help!

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